Southridge taps PIPE market for $19.6 million; Zoloto prices C$10 million of stock

By Sheri Kasprzak

New York, July 23 - Southridge Technology Group, Inc. kicked off the week in PIPEs with a $19.6 million unit offering as part of its merger with RxElite Holdings, Inc.

The merger makes RxElite a public company.

In the placement, Southridge sold 32,666,667 units of one share and one half-share warrant at $0.60 apiece, a 61% discount to the company's $1.56 closing stock price on Friday.

On Monday, the stock gained 13.5 cents to close at $1.695 (OTCBB: SOUT).

The whole warrants in the offering are exercisable at $0.85 each for two years.

Proceeds will be used for costs related to the launch of the company's generic Sevoflurane, for product pipeline development and for working capital.

"The additional capital from this offering positions the combined company to continue the success of RxElite in its current markets, the expansion and acceleration of its product development activities and its offering of highly competitive products," said Daniel Chen, RxElite's chief executive officer, in a news release.

"Becoming a public company allows RxElite to enjoy broader exposure to the investment community and provide us with access to the capital markets as we continue to expand market share and grow our revenues and earnings."

According to the statement released Monday, RxElite has exclusive rights to market Minrad International's generic Sevoflurane in the United States. RxElite expects this to be its principle product in 2007.

"We anticipate significant gross margin benefits from the launch of generic Sevoflurane in the last six months of 2007," said Chen, in the statement.

Based in Meridian, Idaho, Southridge develops and manufactures generic prescription drugs.

Market crawls

Meanwhile, in the broader market, a sellsider said volume is creeping because of the summer vacation season.

"It's really hard to get anything done in the summertime," he pointed out. "Everyone is away on vacation. It's not like there's nothing getting done. There are a handful of things I've seen but comparatively, it's pretty dead."

In the Canadian PIPE market, however, a surge in gold prices last week helped push some offerings this week.

"It seems to be a function of that push we had near the end of last week," said a Vancouver, B.C.-based sellsider on Monday. "Today wasn't that great [for gold prices]. We've been toying with $700 [per ounce] for some time now. I think it could happen this year."

On Monday, gold prices fell by $3.20 to close at $681.50.

Zoloto plans C$10 million deal

Looking to particular gold offerings, Zoloto Resources Ltd. negotiated the terms of a C$10 million stock sale on Monday.

The deal includes up to 6,666,667 shares at C$1.50 each.

Agent Kingsdale Capital Markets Inc. has a greenshoe for up to 3,333,333 additional shares.

The offering is set to close on Friday.

The company intends to use the proceeds for exploration on its Russian properties in Chukotka and Irkutsk, as well as for future auctions of gold projects, as the company plans its expansion in the area. The remainder will be used for general corporate purposes.

"Our recently announced name change to Zoloto Resources, along with our existing portfolio of gold projects and continuing pursuit of quality gold properties, reflects our focused objective of becoming a successful mid-tier gold producer in the Russian Federation," said Richard Maddigan, the company's director, in a statement.

On Monday, the stock fell by 5 cents to end at C$1.73 (TSX Venture: ZR).

Zoloto is a Vancouver, B.C.-based gold exploration company.

Tyhee's C$7 million deal

In other gold news, Tyhee Development Corp. priced a C$7,000,020 offering of common and flow-through shares.

The deal includes up to 7,692,308 flow-through shares at C$0.52 each and 2.381 million non flow-through shares at C$0.42 each.

The company has also agreed to sell 4.762 million non flow-through shares at C$0.42 each to an investor in the United States.

Loewen, Ondaatje, McCutcheon Ltd. is the agent for the deal, which is expected to close on Aug. 16. The agent has an over-allotment option for up to 20% of the placement size.

The proceeds will be used for development on the company's Yellowknife gold project.

The company's stock gained half a cent on Monday to end at C$0.455 (TSX Venture: TDC).

Tyhee is another Vancouver, B.C.-based gold exploration company.

Campbell sells debentures

In related news, Campbell Resources Inc. sealed a C$4 million offering of convertible debentures with Nuinsco Resources Ltd. and Ocean Partners.

The 11.5% debentures are due in two years and are convertible into units of one share and one half-share warrant at C$0.13 each. The whole warrants are exercisable at C$0.16 each for two years.

Proceeds will be used for development on the company's Corner Bay copper project near Chibougamau, Quebec.

"The development of Corner Bay is an important part of Campbell's strategy to increase throughput and decrease unit costs at the Copper Rand mill," said Andre Fortier, Campbell's CEO, in a news release.

"Corner Bay is one of two satellite deposits in the Chibougamau camp that we expect to bring on stream this year, the other being the Merrill Island open pit, and we are evaluating others to drive profitability in 2007 and beyond."

The stock gained 2 cents to end at C$0.18 Monday (Toronto: CCH).

Montreal-based Campbell is a gold and gold-copper exploration company.

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